A “poor person”, assuming employment, has just had their income tax reduced, the exemption limit is being raised, and they are still collecting a full GST rebate check. Remember GST is not charged on food (unless in a restaurant), clothing, or shelter. On a small scale the GST is a real “tax the rich, give to the poor” plan. Last time I checked a full GST rebate is about $85 per quarter, or $340/year. That’s the amount of GST you’d pay on $5600+ worth of taxable goods. (these figures are based on my limited experience, nothing researched).

I’m all in favor of higher personal exemptions, what exactly would you like the government to do?

1. It was promised
2. It’s visible
3. People are bad at math

Everyone buys stuff and nearly everyone buys big stuff like cars. When they see a GST drop, lots of money falls off in little places. It’s like a constant positive reinforcement.

But if you look at the personal tax exemption, you get into muddy waters. It’s probably more money for the people who need it, but let’s be real here, the people who need it don’t really know or understand. These are the people who are bad at math and probably don’t understand/do their own taxes.

And if you’ve followed our social support programs, you’ve noticed that we’re dropping more and more people from the programs b/c we’re using numbers from ’89. I’m not kidding you, the provincial programs in Manitoba: CRISP, 55+, Housing benefits, etc. are all based on numbers from the late 80′s and early 90′s and they haven’t been indexed. They’ve been servicing less and less people every year since inception. This type of tax cut basically cancels out the loss in low-income support for most of those people.

So why don’t we get cuts in capital gains taxes?

B/c nobody knows or cares! There is a very limited set of the population that have non-registered investments that are actually affected by the cuts to capital gains taxes. What’s the number, like 5%?

Sure you can include all of the homeowners, but they have a different issue: inflation. Plus they don’t tend to notice b/c they skip the tax and just roll up to the next house.

I like the ideas of cutting taxes across the board, but it’s obviously politically weak. Personally I’d just like to see flat taxes across the board, with government supplementation for “those in need” (which we already have to some extent). But that’s also just a pipe dream

If the government really wanted to increase the productivity of Canada it should have cut the tax rates for all the tax brackets (or just the highest bracket where it would get the most bang for its buck but be a politically stupid move).

Warren: At least we can support debt reduction. The problem with surpluses is program spending keeps increasing. Yes, this government tells us that every surplus dollar goes towards the debt but that is only for one year. From the next year on the surplus is simply spent. Even after these “broad-based tax cuts”, the government is still left with a $10B surplus.

The proof will be in the pudding of budget surpluses. Everyone likes unexpected surpluses, but the public won’t put up with more double digit surpluses for much longer. We all watched the Conservative opposition tear the Liberals apart on “over taxation”.

Every tax cut helps us retire, or at least gives us more control over our own destiny. Which isn’t to say I don’t support our welfare state and national healthcare, but I’m not too interested in paying previous generations’ debt back overly quickly.

The spouse is also able to claim 9600 if working, however for single income family, the spousal amount would also be increased (I figure to about $8200, give or take $50, up from $7581).

Yes $9600 is a big jump and while we probably would not have seen that, it would have been close (2006-2007 was around 7% while previous couple of years were lower). So a savings but not as much as we would think on the surface (given that alot of Canadians are not as aware as those who follow blogs like this, I think they are easily misled that this is a bigger impact than it actually is. Perhaps I’m just jaded in that we are not getting real beneficial tax cuts to help us retire(like some of the other ones discussed like family unit tax, better tax treatment on capital gains if re-invested etc).

Thank you for keeping up a great blog (one of my favourites, along with MDJ and FP), keeps me upto date and thinking.